Title: Stackelberg game in a two-echelon supply chain involving service level and distributed controllable lead time

Authors: Fu Huang; Huaming Song

Addresses: School of Economics and Management, Nanjing University of Science and Technology, 210094 Nanjing, China ' School of Economics and Management, Nanjing University of Science and Technology, 210094 Nanjing, China

Abstract: This paper considers Stackelberg game decisions on the product and ordering policy in a two-echelon supply chain consisting of a manufacturer and a retailer. The manufacturer is the leader and provides a home delivery service, thus he controls the distributed lead time, which consists of three components: setup time, production time and shipping time. First, a Stackelberg game model and a benchmarking integrated model involving service level and lead time are established, then some properties of this model are deduced, and efficient algorithms which are based on these models' analyses are developed. Furthermore, a numerical example is presented to illustrate the models and the algorithm, and some comparisons with the existed model are also given. The comparative results show that both the retailer's and the system's profits are increased effectively in the case of service level concerned.

Keywords: distributed lead time; Stackelberg game; service level; decentralised decision; integrated decision.

DOI: 10.1504/IJAMS.2017.084950

International Journal of Applied Management Science, 2017 Vol.9 No.2, pp.114 - 134

Received: 03 May 2016
Accepted: 01 Nov 2016
Published online: 09 Jul 2017 *

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